State-Dependence and Stepping Stone-Effects of Low-Pay Employment in Australia

Lixin Cai

    Research output: Contribution to journalArticlepeer-review

    10 Citations (Scopus)


    Using the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this study shows that low-pay employment not only exhibits state-dependence, but it also has a stepping-stone effect towards higher pay, after observed and unobserved individual heterogeneity is accounted for. The results also show that, other things being equal, people who are on low pay are more likely to be in employment in the future than those who are either unemployed or not in the labour force. However, people on low pay do not appear to be more likely to become jobless in the future than those on higher pay.

    Original languageEnglish
    Pages (from-to)486-506
    Number of pages21
    JournalEconomic Record
    Issue number291
    Publication statusPublished - 1 Dec 2014


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